The apartment renting system in Japan is quite different from that in Europe and the U.S. In some respects, the system favours the tenant as only they can break the contract at any point; however, this comes with several extra upfront costs that can prove onerous.
Estate agents are everywhere in the major cities—walk out of any station and you are almost guaranteed to find one within 100 metres. Which one doesn’t matter as the majority are independent operations that utilize the same database to search for properties.
Viewing an occupied property is strictly prohibited under the terms of the rental contracts and, if someone is living in the apartment (called “mansions” in Japanese), you must wait until they have vacated (and the apartment has been cleaned) before you can arrange a viewing. For the more popular locations or properties it is not uncommon for people to sign a lease contract without having been inside. This may seem risky, but age, location, and rent per square metres relative to other properties in the area give a good indication of what you can expect, and once you have seen several properties you can start to make a good guess from the layout plan and other information what’s in store for you. This is not the norm but it does happen.
In cases where the tenant has vacated and the property is empty viewings can usually be arranged there and then. There’s about a 50/50 chance you’ll be able to view any given property on that day, but it is nevertheless advisable to search and arrange an appointment ahead. The listings on popular sites such as chintai.net and homes.co.jp substantially overlap with the estate agents’ own databases.
The below table gives a rough idea of what you can expect in terms of up-front costs once you have found a property you like.
|Base rent||This is quoted on a monthly basis and you will need to pay at least 1-month’s rent in advance.|
|Maintenance fees||Typically around 10% of the base rent. These are borne by the tenant so should just be added to the base rent when thinking about a budget.|
|Reikin (“key money”)||This is money that you pay to the landlord and will not be retuned. Some places are advertised with no key money but 1-2 months’ base rent is standard.|
|Deposit||Usually 1 month’s base rent. Note that cost for cleaning the apartment and changing the locks when you vacate will come out of your deposit so even if you hand it back in perfect condition you should only expect about half your money back.|
|Guarantee||This is a yearly fee that you will need to pay to a company to guarantee your rent. This is not always required but as a foreigner there is more chance that the landlord will demand it. It is usually around 0.5-1 month’s base rent.|
|Brokerage fee||This is paid by the tenant to the estate agent. 1 month’s base rent is standard but some estate agents may offer their services for 0.5 month’s base rent (e.g. as part of a promotion).|
Standard contracts are for two years. This doesn’t mean that you, as the tenant, are tied in for this period. You may leave at any time so long as you give the contractual notice period. The landlord, however, is restrained by the contract giving you the peace of mind that you’re not going to be kicked out with a month’s notice before the two years is up. At the end of the period the contract you will have the option to either leave or pay 1-month’s rent or the original key money again (whichever is greater) and sign a new 2-year contract (maybe with a slightly higher base rent).
The documentation involved is generally horrific. You’ll need to sign at least 20 pages of a binder outlining in the minutest detail what you can and cannot do in the apartment, as well as the expected costs involved should you infringe on one of the innumerable clauses. Constitutional changes probably require less paperwork.
Because the whole process is so formal and you are never dealing with individual landlords (contracts are through estate management companies) once the paperwork is out of the way you will have a hassle-free two years. Maintenance companies deal with issues like broken elevators or plumbing faults, and the idea of the landlord calling in to check the property as may happen in other countries is unthinkable in Japan.
Even if the ultimate owner is an individual landlord (as oppose to one of the major conglomerates like Mitsubishi or Sumitomo who build and lease apartments as part of their business) there’s a good chance they’ve never even seen the property themselves: many older and moneyed Japanese see property as a low-risk investment that offers a better yield than an annuity and so buy single room apartments and leave the rest to the management company.
The Real Cost for First Time Renters
If only the cost of moving ended there. Unfortunately, the above omits to mention that when you first turn the key to your new apartment you will be greeted by nothing: no fridge, no microwave, no washing machine, no bed, no curtains, no furniture, and (in some cases) no air conditioning unit or light! These you will need to buy yourself and take with you when you next move.